Gratuity
VIJAY K. TEOTIA
(Querist) 16 November 2013
This query is : Resolved
Can a company withold payment of gratuity in terms of termination of a managerial person against whom criminal proceedings filed by the company. the said employee submitted resignation but refused by company and his services are terminated after internal enquiry. Any impact on payment of gratuity.?
Advocate M.Bhadra
(Expert) 16 November 2013
You can not withhold the gratuity for prnding enquiry and criminal case,one obsevation follows:-----
The state government had moved the apex court challenging the October 31, 2007 order of a division bench of the high court which had held that under the Bihar Pension Rules, the government does not have power to withhold gratuity and pension during the pendency of departmental or criminal proceeding and or withhold leave encashment at any stage either prior to or after conclusion of the proceeding.
Observing that gratuity and pension are hard earned benefits of an employee and right to receive pension is in the nature of “property”, the Supreme Court has held that this right cannot be taken away from a government employee pending departmental or criminal proceedings.
“It is an accepted position that gratuity and pension are not the bounties. An employee earns these benefits by dint of his long, continuous, faithful and un-blemished service. It is thus hard earned benefit which accrues to an employee and is in the nature of “property”.
“This right to property cannot be taken away without the due process of law as per the provisions of Article 300 A of the Constitution of India,” a bench of justices K.S Radhakrishnan and A.K Sikri said.
The court passed the judgement while dismissing the appeal of Jharkhand government against the state’s high court order directing it to release the withheld dues of its retired employee Jitendra Kumar Srivastava, who had criminal cases pending against him.
“We are of the opinion that the right of the petitioner (Srivastava) to receive pension is property under Article 31(1) (of the Constitution) and by a mere executive order the State had no power to withhold the same.
“The order dated June 12, 1968 denying the petitioner right to receive pension affects the fundamental right of the petitioner under Articles 19(1)(f) and 31(1)of Constitution, and as such the writ petition under Article 32 is maintainable,” the bench said.
It also said “a person cannot be deprived of this pension without the authority of law, which is the Constitutional mandate enshrined in Article 300 A of the Constitution. It follows that attempt of the appellant to take away a part of pension or gratuity or even leave encashment without any statutory provision and under the umbrage of administrative instruction cannot be countenanced.”
R.K Nanda
(Expert) 16 November 2013
no more to add.
VIJAY K. TEOTIA
(Querist) 16 November 2013
sir, Can you please provide the citation? Is this applicable to private employees also?
Thanks for the same
Advocate M.Bhadra
(Expert) 16 November 2013
Considering the provisions of Payment Of Gratuity Act, generally the employer cannot withhold amount of gratuity. However, Section 4(6) of the act allows employer to forfeit the amount of gratuity, if services of employee have been terminated for his acts of negligence, willful omission causing any damage or loss, then to the extent of loos or damage.
According to section 4(6) (a), the gratuity payable to an employee, whose services have been terminated for any act due to wilful omission, or negligence causing any damage or loss to or destruction of property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused.
ii) According to Section 4(6) (b), the gratuity payable to an employee may be wholly or partially forfeited-
a) If the Services of such an employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part
b) If the services of such an employee have been terminated for any act which constitutes an involving moral turpitude provided that such offence is committed by him in the course of his employement.
V R SHROFF
(Expert) 17 November 2013
Gratuity is different from PF & Pensions.
Gratuity can be denied to dishonest employee.
Rajendra K Goyal
(Expert) 19 November 2013
For citation search indiankanoon.com.
ajay sethi
(Expert) 19 November 2013
gratuity can be denied as criminal proceedings are pending against you . section 4(6) (a) (b) would be applicable in your case .
see SC judgement in YC singla v/s PNB
www.indiankanoon.org/doc/103436927/
T. Kalaiselvan, Advocate
(Expert) 19 November 2013
Gratuity payment is for thankful services rendered by an employee, in a criminal/embezzlement case, the purpose is defeated hence the law says so as referred by ajay sethi.
